The “Fideicomiso” Bank Trust
In Mexico a Fideicomiso bank trust is required if a non-Mexican citizen wishes to purchase rights to titled residential property in coastal areas or along land borders. The Fideicomiso is a 50-year renewable and transferable Bank Trust which U.S., Canadian, and other non-Mexican citizens can use to acquire irrevocable ownership rights to property in Mexico.
Some Specifics About the Trust
The Fideicomiso bank trust is in effect a legal alternative to deeded (fee simple) ownership and was implemented so that non-Mexican nationals would be able to enjoy property rights in the formerly restricted land border and beach areas. The Trust system is a method of ownership sanctioned by the Mexican government and provided for in the Mexican Constitution. It functions similarly to a family trust you might set up in the United States whereby property could be passed to beneficiaries without going through a probate process. Your Fideicomiso trust also allows you to name substitute beneficiaries who would recieve the property in case of your death, without having to become involved with the Mexican legal system. There is a one-time set up fee and an annual fee, with fee amounts depending on the value of the property.
Banks and Handling of the Trust
There are a number of Banks authorized by the Mexican government to hold the Real Estate Fideicomiso, including HSBC Bank. Title is delivered by the seller to the Bank Trust with the Bank acting as the Trustee. The Trust designates you, the foreign buyer(s), as the Beneficiary(ies). You as Beneficiary(ies) are given use and control of the property including the power to make investment decisions. It is your Trust and not the property of the government or an asset of the Bank. The Bank reviews paperwork of the current owner/developer and the purchaser prior to forming the Trust to ensure that the documents conform to legal standards. If the Bank should ever fail, the Fideicomiso is transferred to another authorized Bank.